Banking licence of Bank for Innovation and Development revoked and provisional administration appointed
By its Order No. OD-2902, dated 07.11.2018, the Bank of Russia revoked the banking licence from the Moscow-based credit institution Joint-stock Company Bank for Innovation and Development or JSC BID Bank (Registration No. 2647) from 7 November 2018. According to its financial statements, as of 1 October 2018, the credit institution ranked 286th by assets in the Russian banking system.
The operations of JSC BID Bank were found to be non-compliant with the law and Bank of Russia regulations on countering the legalisation (laundering) of criminally obtained incomes and the financing of terrorism with regard to the completeness and reliability of information provided to the authorised body about operations subject to obligatory control.
JSC BID Bank has long been in the purview of the Bank of Russia due to the bank’s suspicious transit transactions. Despite the measures taken by the supervisor against the bank the volume of the said operations continued to rise in 2018 Q2 and Q3. High risk transit deals largely related to selling cash by trade companies accounted for a major portion in the said transactions. Therefore, AML/CFT internal controls of JSC BID Bank cannot be recognised as effective. These circumstances showed that the management and owners of the credit institution were reluctant to take any efficient measures to preclude the bank’s involvement in suspicious activity of its customers.
The Bank of Russia repeatedly (6 times over the last 12 months) applied supervisory measures against JSC BID Bank, including two restrictions on household deposit taking. Meanwhile, the credit institution repeatedly violated the said restrictions.
Under these circumstances, the Bank of Russia took the decision to revoke the banking licence from JSC BID Bank.
The Bank of Russia took this decision due the credit institution’s failure to comply with federal banking laws and Bank of Russia regulations, repeated violations within one year of the requirements stipulated by Articles 7 (except for Clause 3 of Article 7) and 7.2 of the Federal Law ‘On Countering the Legalisation (Laundering) of Criminally Obtained Incomes and the Financing of Terrorism’, and the requirements of Bank of Russia regulations issued in compliance with the indicated Federal Law, and taking into account repeated applications within one year of measures envisaged by the Federal Law ‘On the Central Bank of the Russian Federation (Bank of Russia)’.
Following banking licence revocation, JSC BID Bank’s professional securities market participant licence was also cancelled.
By its Order No. OD-2903, dated 07.11.2018, the Bank of Russia has appointed a provisional administration to JSC BID Bank for the period until the appointment of a receiver pursuant to the Federal Law ‘On Insolvency (Bankruptcy)’ or a liquidator under Article 23.1 of the Federal Law ‘On Banks and Banking Activities’. In accordance with federal laws, the powers of the credit institution’s executive bodies were suspended.
JSC BID Bank is a member of the deposit insurance system. The revocation of the banking licence is an insured event as stipulated by Federal Law No.
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